Boston Beer Shorts Ease, But Options Tell a Different Story

SAM heads into its July 28 earnings release with short sellers pulling back even as options traders turn unusually bullish — a split in positioning that makes the print harder to read than usual.

The short interest story is genuinely notable. Bears hold nearly 18.4% of the free float in SAM, a level that ranks in just the 8th percentile of the broader market for bearishness — meaning very few stocks carry more skepticism. Yet that position has been unwinding. Short interest has fallen about 4% over the past month, from a high around 1.72 million shares to roughly 1.54 million. The borrow market reflects no urgency either: cost to borrow has dropped more than 20% on the week to under 0.4%, and availability runs at about 502% of outstanding short interest — meaning lendable supply dwarfs current borrowing demand. That combination suggests the short side is reducing risk rather than building into the print.

Options positioning tells the opposite story. Call demand has dramatically outpaced puts recently, with the put/call ratio collapsing to 0.69 — nearly 1.7 standard deviations below its 20-day average of 1.55, close to a 52-week low. This is a striking reversal from late June, when the PCR exceeded 2.0. Something shifted in options sentiment over the past ten days, driving heavy call accumulation just ahead of earnings. The stock has also recovered 3.2% in the last session, though it remains essentially flat on the month at $180.15, well below a consensus price target of $201.

The analyst community has moved in one direction: down. Every recent target revision has been a cut. Goldman Sachs maintained a Sell with a $169 target in early July. Citigroup trimmed twice in quick succession, most recently to $185 after the prior week's cut from $240 to $195. RBC Capital cut to $210 from $234, and UBS dropped to $190 from $245. The direction is uniform, even where ratings remain positive. Bulls point to a gross margin recovery — Q1 gross margins reached 48.3%, reportedly a five-year high — and to Twisted Tea's potential reacceleration alongside new entrant Sun Cruiser. Bears flag that shortfall fees, production prepayments on the Truly brand, and elevated promotional spending could cap margin gains even as volumes remain soft. The most recent prior earnings print, in April, saw SAM fall 9.4% on the day and 14.2% over the following week, providing some context for how the market has treated disappointments.

Millennium Management stands out among institutional holders, having added 314,798 shares as recently as mid-July — making its position of 411,413 shares, or 4% of outstanding, a fresh commitment just before the print.

The July 28 report will test whether the gross margin expansion story can hold in the face of a Street that has collectively marked down its expectations, and whether call buyers buying into the recovery thesis or short sellers quietly exiting are reading the setup correctly.